Deals on the net: Due for change?

Social buying and group buying and flash discounts are just some of the terms for an industry that has been getting a lot of attention since US-based GroupOn did the utterly unthinkable – they said no to Google. In India, we already had a few sites in the industry, and today there are around 20 large sites. Aside from the big names like SnapDeal and GroupOn itself, which entered by buying SoSasta, there are plenty of others, including Deals and You (which just crossed 1 million users) and Dealivore and Taggle, operating around the country, and Travelmartindia having just launched a group buying site that specialises in travel deals.

But is the deals space played out? A few new e-commerce sites, based on deals, certainly seem to think so. They insist on the need for a more sustainable model, which may not be as eye-catching, but would create a sustainable ecosystem.

Rajeev Dhal, CEO, BigBucks, which will be launching a deals site called Grabdeal.com soon, said, “People start to find these deals arbitrary after a while. Of course, there’s a market for them, but we believe that it’s been explored, and that it’s not something we want to do. After all, how many times will you go to a spa, or get a tattoo? We want to create a model which encourages long-term engagement with the users, and gives them real value.”

Kamna Hazrati, Manager, Marketing and Branding, Avenir Labs, which recently launched mDeals.in, also feels that the model has its limitations. Hazrati explained, “They are able to offer great deals, but it’s for a short time, and it might not be the deal that I want. With mDeals, we look to create packages, and improve the user experience. Instead of 90 per cent, we might offer only 30 per cent, but it’s a good deal and it’ll be there for at least a month.”

Instead of selling a deep discount, the company is giving the discounts to users without making them pay anything. Unlike a deals site, which takes a portion of the total ticket from the user, mDeals does not, instead looking to earn revenues from the advertiser. Hazrati added, “We’ve seen a good response, Addiction Gym, for example, has been on board with us for six months now.”

Finding new ways to engage
While mDeals is an example of targeted marketing, sending people mailers based on their interests that they choose to get, Grabdeal wants to add value by making shopping fun. In theory, this sounds very similar to Adepto’s Trol.ly, by layering a game mechanic into the buying process.

While Dhal would not reveal the nature of the game, he said, “We’re building a full engagement platform, which the users can engage with and earn deals or if they don’t want to do that they can just come to the site and pick up a smaller deal anyway. They could go from anywhere between 10 per cent and 90 per cent, if they want to play the game, but otherwise we’re still going to offer some deal to the users, so it’s win-win.”

The concept of making shopping fun beyond just deals echoes what Kiran Kumar, Co-founder of Trol.ly, had said to exchange4media earlier, “Using a game mechanic becomes a great way to build engagement between the users and the brands. You don’t need to make a sale every time they come online then, as long as you get them to interact with the brand. In this way, someone who shows interest in one product could be exposed to the whole inventory, within the game so it doesn’t feel like advertising, but is a strong engagement platform.”

The goal of Trol.ly is to provide brands with a social media engagement tool beyond just gathering likes and fans without knowing what to do with them, including a call to action in the interactions as well, and enabling sharing and discovery on social networks.

Prior to Big Bucks, Dhal had worked as Country Head of J9 Ventures, and his new Head of Business, Arun Yadav, had earlier headed business development at Pacfield India, while Head of Technology, Pranav Shankar, was previously with Solution Hub as Chief of Technology. The three believe that their game layer will help the site stand out and change the deals paradigm. Yadav said, “Our game model is completely new and the deals space has not been properly explored. We are creating a model which will have very active users and create long term engagement, which could drive e-commerce in a way that the group buying sites really don’t.”

Hazrati added, “We’re looking to create long term partnerships with the vendors, and creating a model where the deal you want is available when you want it. That’s what we feel is the future of deals sites.”

Despite the enthusiasm, it’s unlikely that the model will do away with the group buying sites. However, each of these has the potential of becoming a major player in the e-commerce space as well by doing something different.